Adjusted for AOCI, ratios at five regional banks fall short
Impact of reinclusion on CET1 capital ratio would trip up Truist, Ally and others
The capital ratios of five out of 10 US banks analysed by Risk Quantum would fail to meet minimum levels if the Federal Reserve’s proposal to include unrealised gains and losses in smaller banks’ capital requirements had applied at the end of the third quarter.
Under current standards, the 10 US regional banks had an aggregate Common Equity Tier 1 (CET1) ratio of 10.39%, an improvement on the previous quarter’s 10.07%.
However, accumulated other comprehensive income (AOCI) – which accounts for
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